On the sidelines of the Raisina Dialogue in New Delhi on March 7, Indian External Affairs Minister S. Jaishankar met Iran's Deputy Foreign Minister Saeed Khatibzadeh. On the same day, Bloomberg reported that India had separately sought US clarity on how the DFC's $20 billion Hormuz insurance program would work for Indian tankers.
These are not two complementary tracks. They are two different answers to the same question: on whose terms does India move oil through the Strait of Hormuz?
The Iran channel says: India is a friend, and friends transit freely under IRGC exemption. The DFC channel says: India is a US-aligned partner, and US insurance infrastructure enables passage under American auspices. Both cannot be true simultaneously. India's choice — which it is now actively making — will resolve the attribution contest that matters more than any peace talk.
The Strait of Hormuz did not close because Iran sank Western ships. It closed because seven insurance clubs filed paperwork.
Between March 1 and March 2, seven of the twelve clubs belonging to the International Group of P&I Clubs issued 72-hour cancellation notices for war risk coverage across the Persian Gulf, Gulf of Oman, and all Iranian territorial waters. War risk cover effectively ended at midnight on March 5. Transits collapsed 81% in the first week. Maersk, MSC, Hapag-Lloyd, CMA CGM — the four largest container carriers — suspended operations without a single vessel being fired on.
The IRGC didn't need a navy to close Hormuz. It needed Lloyd's of London to update its risk assessment. Two drone strikes near tankers — visually spectacular, economically modest — were sufficient. Lloyd's moved. The rest followed automatically.
This is what I called the invisible siege: the blockade runs through the insurance market, not through the strait itself. Iran's deputy FM told the New Delhi conference on March 7 that the strait was "not closed" and Iran had "no plan to close it." He was technically correct. Iran didn't close it. Underwriters did.
Iran's stated policy is explicit: vessels from the United States, Israel, and European allies will be considered military targets. The IRGC has not classified Indian vessels as enemies. When India-flagged ships appeared in Bloomberg's early transit counts — one on March 4, flagged among the few non-NIOC vessels to cross — it was not an oversight. It was the exemption working as designed.
India's positioning makes it structurally eligible for this category. India is a Quad member but not a NATO ally. It signed the condolence book for Khamenei but said nothing about the IRIS Dena. Its foreign policy tradition is non-alignment, not collective defense. When Iranian vessels were being sunk in the Indian Ocean, India's silence was the most informative statement it made (see essay #76). Silence is not endorsement. But it is also not condemnation. In the IRGC's binary classification system — enemy or not-enemy — India has carefully remained not-enemy.
The Raisina Dialogue meeting made this explicit at the diplomatic level. Iran's deputy FM came to New Delhi during an active war to sign a condolence book and meet India's EAM. Iran needed India to accept an offer. India needed to know the terms. What Jaishankar and Khatibzadeh discussed is not public. But the structure of the negotiation is visible: Iran was offering India the "friends transit freely" window, and India was deciding whether to accept.
The DFC's $20 billion Hormuz program was framed as insurance infrastructure. I argued in essay #95 that it was actually attribution infrastructure — Trump pre-purchasing the right to claim credit for Hormuz reopening, regardless of what actually causes vessels to move.
India seeking US clarity on the DFC mechanism is India asking: can we be in the DFC system? The answer matters because the DFC and the Iran channel are mutually exclusive. If India uses DFC insurance to transit, it is participating in the US attribution narrative. The implicit message: Hormuz was closed, the DFC opened it, US policy worked. If India uses national reinsurance under implicit IRGC exemption, it participates in the Iran attribution narrative: Hormuz was never really closed to friends, the IRGC is the authority here.
India is a US-aligned democracy. It has been a Quad partner, cooperating on Indo-Pacific security. Accepting Iranian terms explicitly — even implicitly by transiting under IRGC exemption — carries domestic and diplomatic costs that the Modi government would prefer to avoid. The DFC ask is India trying to find a mechanism that preserves US alignment without waiting months for a formal reopening.
The problem: DFC insurance doesn't change the physical threat. The IRGC will not be deterred from targeting a US-insured vessel because it is US-insured. The DFC covers the loss after the sinking, it doesn't prevent the sinking. India's shipowners know this.
India's most likely path is neither pure DFC nor explicit IRGC-endorsed transit. It is a third option that has no official name: Indian vessels, Indian reinsurance, Iranian non-interdiction by policy rather than by formal agreement.
The formula works like this. India's state oil companies (IOC, BPCL, HPCL) charter Indian-flagged tankers. GIC writes war risk coverage. Vessels depart Gulf ports for India without announcing they are operating under Iranian exemption. Iran does not fire on them because they are not enemies. Lloyd's is not involved. DFC is not involved. The IRGC does not make a press statement. India resumes crude imports and makes no public declaration about whose terms govern the transit.
This is strategically autonomous ambiguity: India moves oil without endorsing the framing of either party. It is sustainable as long as the IRGC's classification of India as not-enemy holds, and as long as the US does not demand that India declare which system it is using.
The US pressure is the key variable. If Washington tells New Delhi that using Iranian exemption terms is a sanctions violation or a violation of allied solidarity, India faces a real choice. If Washington stays quiet — because it needs India in the Quad and cannot afford to alienate the world's most populous country over oil imports — India threads the needle.
Jaishankar almost certainly spent part of the Raisina meeting testing whether this formula was possible. He did not meet Khatibzadeh to ask if the strait was open. He knows it is open for friends. He was asking whether the political terms of Indian transit would allow India to claim it was operating on its own sovereign terms, not Iranian-granted permission.
In essay #95 I described a three-way attribution contest: Trump (DFC), IRGC (sovereign enforcement), Mojtaba (founding act). I predicted (#078, 72%) that the first Western commercial transit would happen under Iranian announcement rather than DFC escort — because DFC doesn't change the physical threat and the IRGC will open Hormuz when its own interests are served.
India is now a fourth party to that contest — and India's contest is with all three of them simultaneously. If India uses the Iran channel, it validates IRGC attribution without endorsing Mojtaba specifically (the exemption policy predates the succession announcement). If India uses DFC, it validates Trump. If India uses its own formula, it validates neither — and demonstrates that middle powers can extract themselves from the attribution contest entirely.
The middle-power escape matters globally. Japan, South Korea, Bangladesh, Pakistan — all major Hormuz users who are neither NATO allies nor IRGC partners. If India's formula works, it becomes a template. The attribution contest that Trump and Iran are running assumes all parties must choose. India is testing whether that assumption holds.
My read: India will transit under the India formula before March 15. US pressure will be muted because Washington cannot afford to demand India choose. Iran will not fire on Indian vessels because it needs India's implicit validation. The Lloyd's problem disappears for Indian state tankers because GIC can write the risk with government backing. India will not announce which mechanism it used.
The India formula has a tell. If India announces resumption using language like "based on our assessment of the current situation" or "in line with our energy security requirements" — without mentioning DFC, without mentioning Iranian clearance — that is the formula working. Pure sovereign framing with implicit Iranian non-interdiction underneath.
If India's announcement mentions DFC specifically or thanks the US insurance mechanism: India chose the DFC channel, US wins the attribution point, India accepted that Hormuz passage requires US backing.
If India's state oil companies don't resume by March 20: the formula failed. Either Iran withdrew the implicit exemption (signaling India is now classified as insufficiently neutral), or US pressure was strong enough to hold India out, or the risk premium at 1% is simply too expensive for the economics to work.
Each scenario is testable. The Raisina meeting set the clock. Watch for IOC, BPCL, or HPCL announcements in the next ten days.
What Jaishankar knows — and what neither Trump nor the IRGC fully controls — is that the world's largest democracy has a path through Hormuz that doesn't require either party's blessing. The formula isn't open defiance. It's the thing that happens when both sides need you more than you need either of them.